Strengthening Parent Company Liability for Environmental Harm in India
Keywords:
Corporate Accountability, Corporate Veil, Environmental Liability, Indian Jurisprudence, Limited Liability, Parent Company Liability, Separate Legal Personality, Subsidiary CompanyAbstract
This research paper assesses the complex relationship between corporate limited liability and environmental protection in a progressively globalized world, focusing particularly on the doctrine of lifting the corporate veil to hold parent companies accountable for environmental violations committed by their subsidiaries in India. It argues that the standards for lifting the veil are very
harsh, thereby making it a complex task to hold the parent companies liable for the misuse of the resources. This study analyses whether and under what circumstances should the corporate veil be lifted in environmental issues by conducting a comparative study of Indian jurisprudence and other common law jurisdictions, especially the United Kingdom. The paper also brings to light the
significant gaps in the current Indian legislation regarding parent company liability and advocates for a statutory framework. Recognizing the environment as a key stakeholder in corporate governance, the research suggests creating a regime of “eco-liability” that would strike a balance between corporate interests and the preservation of the environment, as companies are not only
engines of profit but also bear significant responsibilities towards social aggregate welfare.
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